IndiGo reins in loss in Q2 on passengers, cost cuts

Mumbai: The disciplined low-fare model adopted by the InterGlobe Aviation Pvt. Ltd-run IndiGo seems to be working: for the quarter ended September, the carrier posted a net loss of Rs6 crore, less than one-tenth the loss posted by its nearest rival in the same period.
SpiceJet Ltd, India’s second biggest low-fare carrier, logged a loss of Rs101 crore in the September quarter. The financials of the third low-fare carrier GoAir, run by Go Airlines (India) Pvt. Ltd, are not available.
A senior IndiGo executive attributed its performance to its “brand new planes” that had helped the airline cut maintenance and fuel costs. Besides, the “lease cost for IndiGo was also very less”. He declined to be identified because he is not authorized to speak to the media.
The combined losses at Indian airlines grew 44.4% to Rs8,557.37 crore in the fiscal year ended March, making it the worst year for an industry beset by high costs, excess capacity and a slump in passenger traffic. They are expected to post similar losses this fiscal, according to various market estimates.
According to data furnished by the ministry of civil aviation on 19 November, IndiGo is one of two airlines that made a profit in 2008-09. IndiGo posted a Rs82.16 crore profit for the year, while full-service carrier Paramount Airways Ltd posted a Rs7.26 crore profit. The full-year loss for SpiceJet was Rs352.50 crore. GoAir’s net loss was Rs22.55 crore.
08/12/09 P.R. Sanjai/Live Mint

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Categories: IndiGo Airlines Dec 2009